Minimizing incentive-driven threat in Proof of Stake protocols

1/ The paper, "Formal Barriers to Longest-Chain Proof-of-Stake Protocols" by Jonah Brown-Cohen, Arvind Narayanan, Christos-Alexandros Psomas, and S. Matthew Weinberg assumes PoS blockchains are "similar" to PoW, except for wasted energy associated with the latter.

— McCoy (@chrisamccoy) September 25, 2018

2/ In other words, they assume PoS blockchains that are leader-based, similar to PoW's method of choosing the winning miner to add the new block to the blockchain.

3/They also assume PoS blockchains use the "longest chain rule," similar to PoW.

— McCoy (@chrisamccoy) September 25, 2018

4/ With these assumptions the aim is to isolate the incentive-driven threat.

5/ Blockchain designs that are not leader-based or that do not use the "longest chain rule" don't fall into the same threat model.

— McCoy (@chrisamccoy) September 25, 2018

6/ @storecoin's BlockFin consensus engine is leaderless -- there is no leader or delegate chosen to create new blocks. The consensus engine requires that all nodes validate and sign the blocks.

7/ For their participation, all validators share the block reward for every block.

— McCoy (@chrisamccoy) September 25, 2018

8/ This equitable incentive model ensures there is no $ benefit in deviating from the protocol.

9/ This leaderless consensus eliminates any long-term tendency toward centralization. By addressing the centralization concerns in the design, BlockFin ensures true decentralization.

— McCoy (@chrisamccoy) September 25, 2018

10/ In @storecoin's BlockFin BFT consensus algorithm, the incoming transactions are assembled into pre-created blocks that are later validated and signed by all validators.

11/ This avoids chain forks, so the longest chain rule doesn't apply.

— McCoy (@chrisamccoy) September 25, 2018

12/ Together, these two properties discourage temptations to deviate from the protocol rules.

13/ So, what could go wrong with such a design?!

🤔

— McCoy (@chrisamccoy) September 25, 2018

14/ Block validation progress requires > 2/3 of validators to sign the blocks, so malicious validators may delay signing the blocks by going offline for extended periods of time.

— McCoy (@chrisamccoy) September 25, 2018

15/ But, unless > 1/3 of validators collude and coordinate their attack, the block validation progresses well. The way BlockFin validation is designed, the whole network and any external observers know who is not signing the blocks.

— McCoy (@chrisamccoy) September 25, 2018

16/ This is because the assembled blocks are in pending state with ~2/3 validator signatures, so all observers know the current state of block validation progress. BlockFin addresses this concern in a novel way, but that discussion is for another day!

— McCoy (@chrisamccoy) September 25, 2018

17/ Decentralization (security) can't be achieved with technology alone. We believe that economics and on-chain governance must bear equal responsibilities. @storecoin's Dynamic Proof-of-Stake protocol, which uses BlockFin as its "technology" foundation, will try to achieve this. pic.twitter.com/mohE5ajFw1

— McCoy (@chrisamccoy) September 25, 2018